NFL is in advanced talks on taking a stake in Disney’s ESPN
Talk about a wild card weekend.
In what would be a stunning move, the NFL and the Walt Disney Co. are contemplating a pair-up that would give the league a stake in the sports media company, said a source familiar with the deal who was not authorized to comment.
The New York Post first reported late Friday that discussions have gone far enough for the league to inform the Players Assn. and team owners.
The sports media unit remains profitable and part of Disney. But expect the company to keep a close eye on its financial performance.
A representative for ESPN declined to comment.
In return for the league’s equity stake, according to the Post, ESPN would take control of NFL Media, the entity that owns the league’s production unit, NFL Films, and the league’s cable channels — the NFL Network and RedZone, NFL.com and NFL+, the recently launched streaming service that enables subscribers to watch games and other related content on mobile devices.
Walt Disney Co. Chief Executive Bob Iger previously mentioned the possibility of finding an equity partner for ESPN, which while still profitable faces a challenging future as pay TV cord-cutting threatens the subscription revenue that has made it one of the most successful media businesses in history.
ESPN has long been the most expensive part of the pay TV bundle, currently getting close to $9 per subscriber. It is now in 73 million homes, down from 98.5 million in 2013.
While the pay TV universe is shrinking, media rights fees are escalating as deep-pocketed tech companies such as Amazon and Apple are vying for properties to add to their streaming services.
One question that will need to be addressed is the reaction of the NFL’s other media partners, NBC, CBS, Amazon, YouTube and Fox, which along with Disney are committed to pay the league more than $100 billion over the next 10 years
Disney’s package includes “Monday Night Football,” which aired on both ABC and ESPN this past season, and two Super Bowls.
ESPN, which could make itself available to noncable homes with a direct-to-consumer streaming service as soon as next year, has tried to find ways to make itself more appealing to younger consumers who are forgoing pay TV subscriptions.
The company recently took an equity stake in a gaming company, Penn National, and put its famous logo on a gambling app called ESPN Bet.
ESPN also licensed the rowdy YouTube show hosted by former NFL player Pat McAfee and airs it weekday afternoons on its cable and streaming channels.
ESPN has found there are risks in taking on outside partners that are not under the total control of the company.
McAfee put ESPN in an embarrassing position as his show gave a regular forum to New York Jets quarterback Aaron Rodgers, who has been critical of COVID-19 vaccine mandates and insinuated without evidence that ABC late-night host Jimmy Kimmel might show up on the list of visitors to pedophile Jeffrey Epstein’s island.
Kimmel threatened to sue Rodgers over the remark, turning the conflict into a tabloid saga for the past week.
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